Playing The Credit Game...Can I win?

[Anonymous]

    I'm new to the credit game and I think there's a plan to create a high beacon score by creating a limited credit file and paying all bills on time and here's my plan, comments and advice are not only appreciated but encouraged.

1) Open 4 accounts: A secured Bank of America credit card with a $300 limit, an Orchard Bank secured credit card with a $300 limit, a Best Buy or comparable card, and an Exxon card.

2) I will start with the secured cards first to create both a history and to prove that I can make payments on time for 3 months before attempting to appy for the other 2 cards.

3) I will make sure that when the balances are reported they will be zero, though I will use the cards in place of cash they will be paid even before they are posted by using the online payment method.

4) I will then apply for the Best Buy and the Exxon card based on my limited but perfect payment history.

5) I will then pay all the balances in full every month to show zero liability.

6) At the end of approximately 15 months I'll check my FICO score and hopefully it'll be in the 700 range.

   All advice would be greatly appreciated. Do you think my plan is a sound one for both establishing credit and creating a high score over a relatively short time? I want to buy a home next December and with the credit crunch and the high number of defaults from consumers that were high risk, would my plan help me get a prime interest rate with lenders though both my credit history and high credit will be limited and my score probably high? Also from your experiences with the the three major reporting agencies what do you think my score would be?

I need all the advice I can get so please don't hesitate to help me any way you can for it would be appreciated.

[Anonymous]

good plan, just let the cc's report every month w/1-10% utilization (fico likes those numbers). now i'll let others chime in.

[Anonymous]

Thank for you encouragement but please can anyone give me advice?

[Anonymous]

Thank you so much for your response. I hope that others can help as well. We just want to you to help educate us and others as well to the lessons learned to improve our lives so that we can help our children and their children to a better life. I hope I'm not being to meladramitic but you really can help us improve our way of life....Thanks

[Anonymous]

Raven, have you pulled your Credit Reports from myFiCO to see where you actually stand in the credit game? If not, I'd suggest doing so. If you have, will you share your scores with us? I think your game plan is sound. But another card, wouldnt hurt. Bringing your total to 5. Just my opinion.. TU: 676 EXP: 665 EQ: 633

[Anonymous]

IMHO- I would not go overboard on the sub-prime cards

You only need 1-2 to re-build with-
You will be glad you did this because after 6 months you should be able to add 1 better card (No fees/better terms)

[Anonymous]

Don't pay your bills before they print to statement, rather pay them a week before the due date. You want your statements to record balances.

If possible charge 2 days after your statement closing date to ensure they do not report a $0 balance. You actually want them to report a low balance right now. Or pay 90% and leave a little to report a balance each month. You want to show new lenders that you are using the cards and making payments.

Not sure what your credit is like, if you have bad things in the past secured cards are good. If just new to credit go for unsecured cards like Citibank and if needed Cap1. Unless you know a secured card with out fees, maybe the Bank of America 99/500. Honestly 2-3 would be fine for 6 months and then apply for unsecured cards that don't cost you money. I would then cancel your secured and get 4-6 unsecured with no annual fees. Long term your probably better with 5 cards vs just 4.

You could also take out a $500 personal loan.

Your plan sounds great! If you could share with us your present score and what accounts are on your credit report and status of accounts, lates, ect. We could give you a better direction. If new to credit a 700 might be just 6 months away.

[Anonymous]

Well maybe 9-12 months since it will take you about 3-4 months to get accounts and let them start reporting.